Bitmain has managed to stay out of the headlines for quite a large chunk of the year following its demise in late 2018, but now it’s coming back with a boom. After making a number of huge investment errors in 2018, Bitmain lost a whopping $740 million in the crypto winter, as well as a massive chunk of cash during the Bitcoin Cash has war. It lost its Hong Kong IPO after its application expired, but now with the Bitcoin price rallying Bitmain is looking to resurrect its IPO dreams in America.
New Year, New Bitmain
At the end of 2018, Bitmain fired its CEO Jihan Wu and hired Wang Haichao to take the helm. In the weeks that followed his appointment, Haichao slashed sales projections as well as halting all mining activities. With Bitcoin’s price rallying, more miners are looking to expand their mining capacity and are therefore buying more mining rigs. This is a huge boost for Bitmain and has rekindled hope that Bitmain can come back into the fray as one of the leading ASIC mining rig manufacturers in the world. The Bitcoin network hashrate is already recovering nicely, hitting a new all-time high last week.
Possible Power Play from China
If you’re not familiar with American politics then this might not have crossed your mind, but by filing for an IPO in America, China could be looking to skirt around US tariffs. Trump cranked up tariffs on imported goods from China – especially electronics – by up to 25%. This means that Chinese mining hardware manufacturers are starting to suffer, but by having its IPO in the US, it should be able to skirt around some of the tariffs. This would be great for Bitmain’s sales as US mining companies would no longer be subjected to the increased tariffs.
Bitcoin Back on Top
The weekend was jam-packed full of massive gains across the board, with Bitcoin leading the way as it smashed past $11,000. This is great news for miners and mining hardware manufacturers, as it looks very much as if the bulls are back in town and are helping the price rise. As the price of Bitcoin rises, so too does the profitability of crypto miners.
If Bitmain manages to convince US regulators that it’s worthy of an IPO – especially after the mess from 2018 – then it would become one of the first publicly traded cryptocurrency startups. Everyone knows that Bitmain needs the money if it’s to succeed, but the damage from 2018 could be too much for investors to face.